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Household Boiler Energy Efficiency: Standards and Gas Utility Programs

Federal energy efficiency standards for household boilers - which are used to heat about 14 million U.S. homes -- are on the agenda for a public discussion at the U.S. Department of Energy (DOE) this week. The current standard for steam and hot water boilers was set in 2008, and DOE is considering an update based on improvements in technology and changes in energy markets since then.

Proposed DOE standards leave lots of potential savings on the table

DOE considered several technologies for higher efficiency, including use of condensing boilers. 'Condensing' refers to the fact that so much of the heat from fuel combustion has been usefully captured that the water vapor produced from combustion condenses into liquid water. DOE estimates that an updated standard that includes condensing natural gas-fired hot water boiler technology could save a large amount of energy, about 1.2 quadrillion Btus for boilers manufactured between 2021 and 2051, and deliver net consumer savings of $3.4 billion. (For context, the United States consumes about 100 quads of energy annually.) However, DOE did not recommend standards to obtain those savings levels.

Instead, the agency last month proposed increasing efficiency standards to a level that would save 0.2 quads and $1.3 billion dollars, still significant savings but leaving far more than half of the potential savings on the table. Although it might seem surprising, DOE's decision seems reasonable.

Sound reasoning at DOE

The key is that while a lot of households would benefit from much stronger standards, many others would be worse off. These include households with particularly costly installations, e.g., where it's hard to change exhaust venting to accommodate a condensing boiler, and those in relatively warm climates where little heating is necessary- so there would be too little energy saved to justify the higher equipment cost. DOE estimates that while average consumer savings would be $201 over the life of a condensing gas-fired hot water boiler, about 33 percent of households would be better off, but another 38 percent of households would only partially recoup their investment. (The remaining 29 percent already adopt condensing technology, and wouldn't be impacted). In other words: While there is a large savings opportunity, there are too many households who would be worse off.

(DOE has also recently proposed an updated standard for hot air furnaces, which are used by around 50 million households, far more than boilers. In that case, a standard based on condensing technology clearly stacks up, as I discuss in an earlier blog.)

Filling the efficiency gap for boilers

If stronger federal energy efficiency standards for boilers don't stack up when it comes to benefitting the most people, what else can be done to maximize this opportunity for consumers and the environment?

First, it's important to stress that many households that would benefit from more efficient boilers don't get them due to several well-recognized barriers. These barriers include landlord-tenant split incentives (e.g., in which landlords pay the higher installed cost but renters get the benefit of lower utility bills), a lack of information, time to learn about the opportunities (particularly since many replacement decisions must be made quickly after a boiler fails during a cold spell), and a natural tendency to minimize initial costs even when faced with a quick payback.

Many gas utility energy efficiency programs address some of these barriers by offering incentives to encourage the adoption of high efficiency equipment. But there's more to be done. DOE's analysis shows that it would be cost-effective for 62 percent of households with gas-fired hot water boilers to adopt condensing technology, nearly double the 33 percent expected without a stronger standard.

So one natural answer is for gas utilities to step up and fill the gap on behalf of their customers with better, expanded, and more effective energy efficiency programs.

Going forward

NRDC has long worked in support of strong, effective energy efficiency programs offered by both gas and electric utilities, just as we have for strong appliance standards. We'll continue to work with DOE, utilities, manufacturers, installers, consumers, states, efficiency providers, and other stakeholders to find ways to grab those savings from boilers.

About the Authors

Robin Roy

Director, Building Energy Efficiency and Clean Energy Strategy, Energy & Transportation program

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